it must be somewhere but...What is the mark up does your music store put on a guitar?
- Thread starter justFred
- Start date
Chris Pile
Well-known member
Re: it must be somewhere but...What is the mark up does your music store put on a gui
Must have been a pawn shop.
Must have been a pawn shop.
chadd
Well-known member
Re: it must be somewhere but...What is the mark up does your music store put on a gui
I worked for a small shop in my early 20s and the owner made sure that I knew the difference in quoting A and B markups on day 1.
NegativeEase
New member
Re: it must be somewhere but...What is the mark up does your music store put on a gui
JustFred -I used your Squire Classic Vibe Tele Thinline broken out as a manufacturing supply chain profitability concept -There is more to this but you get the idea.
1)Fender Actual Costs to manufacture 140.00 GOAL for unit/cost after tax incentives, volume rebates, etc -you don't make prices from this EOY calc
2)Fender Stated Costs to manufacture 180.00 STATED unit/cost -Cost calculated before discounts and corp strategies -This is the unit cost you run a business from
3a)Wholesaler buys from Fender w/ship 244.00 (25% Markup from STATED costs)So if Fender ran terrible and hits STATED cost Fender is operating at 26% Margin from STATED COSTS
3b)Wholesaler buys from Fender w/ship 244.00 (57% Markup from GOAL costs)So if Fender runs a tight ship and hits GOAL cost Fender is operating at 42% Margin
4)Retailer buys from Wholesaler w/shipping 325.00 (25% Markup) Wholesaler is operating at 24% Margin (including Shipping) (Typical Wholesaler numbers)
5)if Retailer Sells at MAP pricing 449.00 (33% Markup) Retailer is operating at 28% Margin (Including Shipping)
6)if Retailer Sells at Sweet Spot 20% of list 520.00 (66% Markup) Retailer is operating at 38% Margin (Including Shipping)
7)If Retailer Sells at MRSP(Does not happen) 649.00 (100% Markup) Retailer is operating at 50% Margin (Including Shipping) (MSRP typically about 5x ACTUAL cost)
As you can see, retailers cant live on MAP pricing alone -as they would be running at 20-30% Margins which is low for retailer -they need trying to live in 35+% margins
Also you can see for manufacturers, the name of the game is efficiency and mitigating costs through volume incentives, tax strategies, subsidies, automation etc to make a large profit percentage in just running the tightest ship possible and pickup profit inside your operation.
JustFred -I used your Squire Classic Vibe Tele Thinline broken out as a manufacturing supply chain profitability concept -There is more to this but you get the idea.
1)Fender Actual Costs to manufacture 140.00 GOAL for unit/cost after tax incentives, volume rebates, etc -you don't make prices from this EOY calc
2)Fender Stated Costs to manufacture 180.00 STATED unit/cost -Cost calculated before discounts and corp strategies -This is the unit cost you run a business from
3a)Wholesaler buys from Fender w/ship 244.00 (25% Markup from STATED costs)So if Fender ran terrible and hits STATED cost Fender is operating at 26% Margin from STATED COSTS
3b)Wholesaler buys from Fender w/ship 244.00 (57% Markup from GOAL costs)So if Fender runs a tight ship and hits GOAL cost Fender is operating at 42% Margin
4)Retailer buys from Wholesaler w/shipping 325.00 (25% Markup) Wholesaler is operating at 24% Margin (including Shipping) (Typical Wholesaler numbers)
5)if Retailer Sells at MAP pricing 449.00 (33% Markup) Retailer is operating at 28% Margin (Including Shipping)
6)if Retailer Sells at Sweet Spot 20% of list 520.00 (66% Markup) Retailer is operating at 38% Margin (Including Shipping)
7)If Retailer Sells at MRSP(Does not happen) 649.00 (100% Markup) Retailer is operating at 50% Margin (Including Shipping) (MSRP typically about 5x ACTUAL cost)
As you can see, retailers cant live on MAP pricing alone -as they would be running at 20-30% Margins which is low for retailer -they need trying to live in 35+% margins
Also you can see for manufacturers, the name of the game is efficiency and mitigating costs through volume incentives, tax strategies, subsidies, automation etc to make a large profit percentage in just running the tightest ship possible and pickup profit inside your operation.
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Re: it must be somewhere but...What is the mark up does your music store put on a gui
Most music stores I have dealt with for used gear will pay between 50% and 60% of what they can sell it for. It also depends on the shape the gear is in.
Most music stores I have dealt with for used gear will pay between 50% and 60% of what they can sell it for. It also depends on the shape the gear is in.
devastone
Well-known member
Re: it must be somewhere but...What is the mark up does your music store put on a gui
When I worked for a used gear store (like a pawnshop that dealt with music gear only), our goal was 30% profit, we paid well so we got a lot of people bringing their stuff in. Granted, this was ~2003 when ebay was booming and stuff was easy to sell, we started all of our auctions at $1 for 3 - 5 days and pretty much knew what they would sell for. Now days that doesn't work, everyone knows to wait for the last seconds of an auction.
When I worked for a used gear store (like a pawnshop that dealt with music gear only), our goal was 30% profit, we paid well so we got a lot of people bringing their stuff in. Granted, this was ~2003 when ebay was booming and stuff was easy to sell, we started all of our auctions at $1 for 3 - 5 days and pretty much knew what they would sell for. Now days that doesn't work, everyone knows to wait for the last seconds of an auction.
Chris Pile
Well-known member
Re: it must be somewhere but...What is the mark up does your music store put on a gui
I used to think that was true, but I soon figured out that there would be another one just like the last one in the coming week. Therefore - I bid what I want to pay, and if it sells to someone else - so be it. I'll get the next, or the next one. I learned early on not to win an auction at any cost - but to pay what I wanted (which is as little as possible).
I used to think that was true, but I soon figured out that there would be another one just like the last one in the coming week. Therefore - I bid what I want to pay, and if it sells to someone else - so be it. I'll get the next, or the next one. I learned early on not to win an auction at any cost - but to pay what I wanted (which is as little as possible).
NegativeEase
New member
Re: it must be somewhere but...What is the mark up does your music store put on a gui
Yep, most people have learned the hard way over the years -so I only jump in with 15 seconds left - so I can keep myself from getting out of control with the competitive juices versus good sense and judgement. maybe time for only 1 or 2 impulse bids over my original plan....
Yep, most people have learned the hard way over the years -so I only jump in with 15 seconds left - so I can keep myself from getting out of control with the competitive juices versus good sense and judgement. maybe time for only 1 or 2 impulse bids over my original plan....
